tv Power Lunch CNBC September 23, 2009 12:00pm-2:00pm EDT
>> thank you very much. let's get to the market action such as it is today. stocks little changed today. telecom, consumer staples among the best performers. energy among the decliners as oil drops more than $3 a barrel. matt nesto is spending the day for us at the new york stock exchange. >> bill, it is a tale of two sectors today. telecom stocks up about 2.2%. energy stocks down about 1.2 and all other eight sectors are little changed. ford is higher. it is the best performing stock in the s&p 500, up over 5.5%. general mills is also very strong today. one of the leaders in the s&p 500. they beat and raised, not in poker, but earnings. if you take a look at auto zone, the only other of two stocks in
the s&p 500 to report rault results, it is on the flip side. down about 6%. let's get to scott wapner at the nasdaq. >> only up four points here, but we have money moving into widely held technology stocks. yahoo! shares higher. citi has upgraded that stock. reiterated, i should say, to a buy. dell putting out a note really good expectations on pc sales in the fourth quarter. take a look, they upped their outlook. the stock at a new, 52-week out look. again, the nasdaq holding on to a five-point game. let's go to sharon epperson.
>> bearish supplies is why oil is down. yes, we have seen oil rising. keep in mind as the dollar index is near the lowest level in a year, a year ago, oil prices weren't $100 a barrel. the difference now, there's about 140 million more barrels now and the supplies are growing. we learned at 10:30, there were about 11 million more added in the past week and that is why oil prices are lower as well as low prices across board. gasoline down about 5% today. heating oil down about 4% today and the bills we saw, gasoline supplies rise the most. they were up about 5 million barrels just in the past week. meanwhile, natural gas continues on its tear thanks to that short
rally. rick santelli, to you in chicago. >> we know there's two big issues. the fed's statement of course is going to be big. what are traders going to be looking at? remember, all dollars that end up in the purchase program start out as tax dollars. just because the treasury pile's diminished doesn't mean the agency pile can't be used for the same idea and purpose. as far as the other, 40 billion, five years. how do i gauge the demand? over the last few days, looking at a five-year chart, we are shadowed following the new five-year. its yield has been in the 230s. it's currently in the 240s. within ten minutes of the auction in about 55 minutes, i will assess demand to see whether it moves in or out of the box and that may give us clues about what investors think about the statement after the
auction. >> thanks. yes, key auction coming up 55 minutes from now. we'll bring you the results live. treasury secretary timothy geithner just finished testifying on financial regulation reform. hampton pearson joins us with the latest. >> the treasury secretary saying reform in the future should not mean too big to fail. chairman barney frank went even f fur ch furture. >> the central objective is to make the system strong enough so we can allow failure to happen in a way that doesn't cause enormous collateral damage to the taxpayer and economy. >> there will be death panels enacted for this congress, but for nonbank financial institutions that will not be considered too big to die.
>> and the treasury secretary says the lines at this time, really the lynch pins of the proposal, to call for a single systemic risk regulator and a new agency. >> nobody will be confused about who's responsible and that's a good place to start. if you give that responsibility to a bunch of different people, then you can't hold them accountable for performance. >> chairman frank also saying he envisions financial regulatory reform hitting the house floor in early november and he's had asnurnss from chris dodd that the senate is ready to act this year. quickly, we're going to take you to pittsburgh where they're getting ready for the g-20 meetings. apparently, some protesters have climbed both the west end and the fort pitt bridges. people have gathered to protest
climate destruction. there's one sign that reads, danger, climate destruction ahead, reduced co2 emissions now. >> those are four people hanging from a sign over the river. >> now, officials have not closed the bridge. you can see cars passing by, going both directions and it's not clear whether they will be closed at some point. >> that will make you hold your breath. oh, my goodness. >> it's reportedly being backed by green peace. >> all right. the national energy summit kicked off in washington today, bringing together executives an labor leaders to set forth new strategies on climate change. becky quick is there talking to some heavy hitters. becky? >> the big focus here today is on finding ways to embrace new energy alternatives without making massive disruptions on the jobs in the economy that are
built around those old, existing energy platforms. it's a tricky task, but the leaders think they can accomplish it. >> we don't want to forget how important the jobs are in traditional industries and this report recognizes the importance of our coal industry and our natural gas industry. we need to find a way to clean up, if you will, those emissions from consuming oil and gas and coal. >> now obviously, a lot of those big, u.s. exporters have been benefits from the weak dollar. something they've been benefits from in the short haul, but over the long run, it is a concern. >> we have major customers in japan, asia, so in the long run, they need to be stable, too. we think a stable dollar is the best interest of everybody.
>> we caught up with the ceo of arch coal and said he's looking for growth of 1 to 2% for 2010. he said it's not great, but better than down 5%. back to you in the studio. >> thank you very much. by the way, "power lunch" is looking at some more every day economic indicators. these are the ones that don't show up in government statistics. these are anecdotal. for example, high-end dining. just look at the latest issue of "gourmet magazine" where they've got cheap eats on the cover. hot dogs. sales of luxury super yachts are on the rise. we want to know what you're observing. send us what you're seeing right
now. we'll be getting your e-mails throughout the show and they can't decide what they're seeing. paul says any apple store that is packed right now, waiting time is very, very long. but on the other side, rick, he was in two best buys, a walmart and old navy this weekend and you could hold a cannon practice without hitting a shopper. >> but apple has cooled. >> i just waited three days for an apple appointment to go in there. >> what are you observing? send us your thoughts. when we come back, the fed and markets, how do you trade ahead? we have a task force ready to go. also, a year ago, goldman asked warren buffett for a cash injection. has it paid off one year later?
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lows. where do they stand now on that? let's talk about that with your "power lunch" task force. joe, i'm going to start with you. you think they will have a more positive tone, but do you think they're going to change any of the key program ins place? >> i don't think so, sue. i think they have the acknowledge the fact the economy is growing after the deep recession, but i don't think they'll be so upbeat as to remove the on hold for extended period language. the big issue is the purchase program. we think right now, they leave well enough alone and don't make any changes. >> bill, you're very bullish on this market as a result partly because of what the fed has done, but you're looking at the. >> absolutely.
corporate america's going to lift this economy back towards normalcy. the american economy's like a 4 747. there's still powerful lift ahead. >> one of those awkward moments, waiting for a five-year note auction as we wait for a fed announcement. will that have an impact? >> if it does, it will be most likely distribution, but i think joe and your other guests are correct. it's probably not going to change a lot here as traders and investors, we need to look for hints that perhaps the fed is krr moving some of these credit facilities. the mortgage-backed securities program probably gets extended to march, so we'll look for hints as to whether the fed will remove these facilities. on the other side, i think your other guest is right in there's
probably upside risk in economic activity. we've seen profit margin expansion in equity prices. there could be upside to stocks, confidence and the economy. >> joe, i read your messages every day and if you were to index them, your spirits are up as much the s&p 500. are we looking at the recovery that might be better than many think? >> yes. in part, we were very negative. we turned early in the summer and i would add to the final, tos last point made, which is operating leverage. we've had three quarters in a row in which gdp shrunk. >> what are you talking about -- when we look forward, what do you think the s&p does in terms of earnings?
are we going to get back to the levels, 83 bucks? >> i think so. if you look at credit spreads and money markets, they've normalized. >> we already paid for earnings of 80 bucks a share. is it already priced in? >> no, i think the earnings are immaterial. you have so many people fearful, underinvested. >> and you're looking for a good october. >> great october. >> all right. thank you, bill, joe, john. good to see you guys, all. be sure to watch nbc special coverage of the fed's decision on interest rates. we'll be joining erin burnett with the reaction, analysis and out look for the markets. up next, don't bet against
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the dow is up 13 points, but some of the stocks that are performing quite well, at&t, which is now up 3 1/4 percent. last year, goldman sachs turned to warren buffett for a cash injection. looks like he made out big with that. bertha has more. >> there are two axioms on wall street. don't fight the tape and don't bet against warren buffett. today, his investment looks like a gold slated call option, but a year ago, didn't seem that way.
buffett agreed to loan goldman $5 billion in part because he expected the government to shore up the system and as he told becky quick, the terms were sweet. >> i got a formula, bet on them when it's the right time to deal and in this case, there's no better firm on wall street. >> yeah, and no better terms. $5 billion in preferred shares is what he paid up with a dividend of up to 10% annually. and warren, the option to buy nearly 144 million shares striked price up $115 a share. it has paid off quite handsomely. it looked like he was too early five days later. goldman shares would sink to $52 that fall. but today, he's not only gotten
his $500 million interest payment, it's worth over $300 billion. a few days later, buffett made a similar, $3 billion loan to ge that offers up 10% interest with warrants to buy nearly 135 million shares at 2225. those warrants though are still under water. he says he has no intention to cash up and they're paying about $1,000 a minute. if you want more on warren's investment and taking a look at some of his recent interviews, check out the blog. >> another reminder that he is a long-term investor. we all look three months later and say, see, he's lost his
touch. i remember the dot com boom. through most of the '90s there, he didn't invest in technology, people saying he lost his touch. he was proven right again. >> he got a better deal than the government. he gave half the money to get the same amount. but one could argue that buffett's endorsement was much more valuable than that of the government. >> oh, absolutely. it helped confidence, the investor's psyche. >> he has the money to do it. they had to go to the only guy in the room with enough cash. >> at the time when fear was everywhere. straight ahead, tariffs at tomorrow's g-20 meeting. is the president really a free
trader? and coming up, get ready for the "fast money halftime report." are you ready, melissa? >> always ready. we're going to talk about the hot topics in technology, particularly the smart phone makers. apple and a 52-week high. we'll also look ahead to see what the buzz is about in terms of the video game maker. what that might mean in terms of a potential takeover target. more "power lunch" right after this. what are you really buying? a shiny coat of paint? a list of features? what about the strength of the steel? the integrity of it's design... or how it responds...in extreme situations? the deeper you look, the more you see the real differences. and the more you understand what it means to own a mercedes-benz.
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we are almost halfway through the trading day. stocks are steady ahead of the fed. 20 companies hitting new highs including united technologies, gardener, the firm raising its outlook for the entire industry. and general mills up, boosting its outlook for the year. last time president obama met with the g-20, he warned
against protectionism. is the president really a free trader or is he caving into the union? joining us from the power grid today, keith boykin and terry holt. you know how it works. you get 20 seconds to make your case. terry, did he cave in to the uni unions or a free trader? >> pure partisan politics. this is from wto day that signals he's going to use this every chance he gets and it's going to dent his ability to talk about growing jobs in this country because he's playing politics. >> keith, 20 seconds on why i assume you think this is a good thing. >> this is one tariff in one
country, china, with illegal practices in regard to trade. it's less than the international trade commission recommends and another thing you have to consider that the bush administration imposed a tariff last year. >> that's right -- i think a lot of republicans were disgusted with. what do you thisay to that? >> if obama's going to go and lecture other countries about free trade, doing something like this at home is going to seriously undermine his ability to be a leader on the world stage. it's bad for america when we can't lead by example. >> keith, what do you think about the fact that it was the u.s. steel workers who asked him to do this, but none of the tire
companies wanted him to do this. is that him caving into the union? >> i don't think so. some of these companies are multinational companies, but there's two different types of tires from china. a type produced by international companies and some produced by the chinese. the international trade commission made those recommendations to the president in july. it's not the u.s. steel workers who are responsible for this. it's the u.s., bipartson independent agency. >> first of all, it's not the behavior of the chinese is president is punishing. it's the behavior of the american consumer who is looking for an affordable alternative to a high-priced product. it's not just the tires. when the president starts to use this kind of protectionist
regulation, he opens to door to doing virtually on any other product. >> this is one industry we're talking about. >> but this is the first time -- >> let me finish. >> this is one industry with one country and we're talking about one tariff. you have to remember that this is something that china agreed to when they joined the world trade organization. >> and they continue to become part of the world trade organization. >> these are the rules. >> they are finding they violated this rules. he did this without anybody's proof. >> this discussion, guys, we should point out deutsche bank
just put out a note saying cooper tire and rubber, they're raising estimates and the price target because they're going to raise prices on tires. which means we're all going to pay more for tires. >> we knew that would happen. >> right. up next, it is the world's biggest retailer, america's biggest employer. david faber takes you inside the new age of walmart. and check out how shares of walmart have done over the past year. still down 13%. ♪ and that may be ♪ all i need ♪ to know (announcer) customers love ge aircraft engines almost as much as we love making them. innovation today for america's tomorrow. tdd#: 1-800-345-2550 if i'm breathing, i'm thinking about trading. tdd#: 1-800-345-2550 i always have my eye out for a stock on the move.
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we're looking for more on the economic indicators that don't show up in the government statistics. the evidence that you are observing out there of recovery or a continued decline in the economy. and we're getting some great e-mails. we'll share them next hour. send us our observations. >> is it time to spend or save? one place people are continuing to spend is walmart. while other businesses are downsizing, they continue to expand. they're scheduled to open 170 new stores in the u.s. this year. david faber got a look at what's involved in getting a 36 million square foot supercenter up and running.
>> 170,000 square foot. >> i wondered about that. that would be one major store. >> they're going to increase their footprint by 36 million this year. >> they converted the state of rhode island. >> i was thinking, you know what, even i couldn't get through that store in one day. tell us about it. >> we have videotape. >> associates are the front line strategists. what are we going to -- customer service. what? and expectations. all right. >> but before the customers come, there are 125,000 items to move into the store. on this day alone, over 12,000 boxes will be unloaded. their content stacked on the shelves. this less than 24 hours before
the grand opening, the curtain is finally about to rise. >> everybody excited? >> whoa! >> we're down to the details. details we're looking for, the cleaning, dusting, the labels, making sure we have no torn edges, dog ears. >> reporter: long hours, hard work and opening day jitters are fraying nerves. >> we'll be having customers on top of learning and i guess that's what's making me a little nervous. i'm just ready to see what a normal day is going to be like because until now, it's not been anything like normal. >> that store became the 420,000. >> one of the most successful documentaries you did you
produced on the original version and now, you've updated it. >> first of all, this is completely new. five years, so often, people say, tell me more about that story. i want to hear what's happening. after 2004, so much changed in terms of the company really combatting a great deal of criticism over its low wages, health care or lack of health care insurance. the question of course is is it a lot of image creation or are the changes real. we take a closer look at that. they've succeeded in stopping a loss of customers. >> a lot of retailers can't claim that. tonight, you can see the entire documentary. it's the premier of "the new age of walmart." 9:00 p.m. breaking news. we are minutes away from a treasury auction.
we'll have the results, plus first on cnbc, is housing on the comeback trail? we'll have the first tv interview with the new head of federal housing administration. up next, the "fast money halftime report." ♪ yes, you're lovely... ♪ what do you think? hey, why don't we use our points from chase sapphire and take a break? we can't. sure, we can. the points don't expire... ♪ there is nothing for me... ♪ there's no travel restrictions... we could leave tomorrow. we can't use them for a vacation. you can use the points for just about anything. i know... ♪ the way you look tonight ♪ chase what matters.
we're getting to the heart of the action. stocks taking a pause after hitting new highs as investors await the fed's statement. how should you portion yourself? our crew today -- danielle, want to start with you. how's the feel down there? there are to many crossing my in box saying the market feels like it wants to go higher. that scares me. >> it's actually a good thing. the buzz is really loud down here, too. we are coming to the end of the quarter. a lot of window dressing, people
have to make some money. i think you're going to see entry into positions, but with hesitation. we've been talking about the market pulling back. it has not done so and as soon as everybody believes we're in the clear, that's when we believe we'll see that. but the feeling is good and everybody's looking positive. >> i'm guessing you're watching the u.s. dollar. over night, it hit a new, 12-month low. are you placing any bets on the plays whether it be commodities or currencies? >> some of our kind of short dollar positions we've taken in a little bit. i think the market's very short and people are nervous about that. i think some people have moved their positions ahead of this fed meeting. i think some of the activity this morning was guys actually putting some of that to work now that the inventory numbers in the oil sector had people scared. you had a lot of the same trade coming off here.
but i do not expect anything on the policy front that's going to have us change our view that the dollar's going lower. >> brian, what's catching your attention today ahead of the fed meeting? >> what i'm looking for out of the meeting is what they're going to do with the mortgage purchases. that has a big affect on the housing market. if they decide they're going to move rates or move the mortgage program back to march or extend it to mashlg, then that's a day facto easing in the market. that's the key, i think, coming out of the meeting today. >> that will be key, but are you putting money behind that thesis? >> i am. >> jered, you're looking at levels on the charts whether or not it can continue. >> as this market continues to rise, people get nervous and throw fundamentals out the window. i want to look at the chart
here. there are several levels i think are key. very simple, but stuff a lot of people follow. the ten-day around 1059. not far away from where we are now. >> if we cannot hold the ten-day. why the ten-day because most analysts don't use that. it's extremely short-term. >> it is, but as we continue to ride higher, oh, we're climbing this wall of worry. i think as we continue to pay close attention to short-term deviation, that becomes much more important. >> let's move on to what is working in terms of today's market. technology, apple certainly a clear leader, hitting a new high. the smart phone trade is absolutely on fire today. tim, i know you've been a proponent of nokia, but on apple, since it is crossing a milestone, is this the sort of stock that you believe will only go higher if we go higher as a market as a whole?
>> i think apple's kind of stuck here, but over the last couple of days, has broegen out. i think the had people expecting more. in that sense, they're going to outperform. >> danny hughes, in terms of the smart phone trade, we the shares -- are institutions nibbling at the smart phones or mostly a retail trade? >> i think it is a retail trade. they're in there hesitantly. i believe going forward, we're going to see a lot more movement into the tech side because that is been the real driver over these last couple of weeks and i see a lot of that on the institutional side. >> and we should note on the subject of technology being in the headlines, we have the headline crossing. dow jones citing an interview
saying that"back on." the stock has now moved in relation to those headlines but we're seeing more and more m and a activity. there are rumors microsoft may be looking to acquire. >> we're seeing a lot of buyers out there. the options market tells an even more important story. five days ago, melissa -- you're a good one to know this -- volatile had increased substantially in these options starting five days ago. the options markets were pricing something in a couple days ago. still a rumor, but this is one way to take advantage of that potentially. >> tim, what's your gut feel on a microsoft erts pair zblg
microsoft's showing they're looking to get something done, they have a lot of cash to spend. i think it is a place they actually see some growth. i wouldn't speculate other than to say it would be a nice bid. >> we should note that we bring up this "rumor" only because it is in fact moving the stock, moving options. according to option monster, 75,000 calls approximately so far have traded today on average, the total daily volume is 12,000. let's move on to the next trade. nat gas, soaring today. joe, plenty of arguments say the bottom is not in here. >> first, melissa, happy hump day, we're half-way through the week. looking at national gas storage,
clearly fundamentals are bearish but right now short positions in the market are being unwound in natural gas. if you're one of those challenged money managers who are looking for performance, you look at natural gas and crude oil, look six to nine months ago, where are you getting your better return? in natural gas, less regulation. you have the winter coming. forecasts for the winter of 2010 are looking 10% colder than the last ten-year average. i think right now in natural gas you could make the claim that it is okay to scoop up a lot of these equities. >> what do you say about production in nat gas which is going up while demand's going down? seems there are divergent fundamentals here. they're only getting worse on the supply side. >> timmy, the think about national gas and been around it for 15 to 20 years, in that marketplace you can work off inventories very, very quickly. it is a little bit different than oil. oil it takes some time to work off those inventories.
natural gas you get a real good cold snap early in november, december, you'll work down a lot of those inventories very quickly. >> see you tonight, joe. on tonight's "fast money," california's biggest utility company, pg and e. next, a look at uncommon economic indicators that will tell you whether it is time to save. right after this.
welcome back to the "fast money" half-time report. we bring in the ambassador who once talked about ford today. today ford stock is up 5%. ceo saying that auto sales will go up in the next two years which means approximately 14 1/2 million cars. he says he expects to be profitable by 2011. that forecast from 14 1/2 million has to come true, doesn't it? seems like a lot of "ifs" there. >> i talk often about the global auto trade with emerging markets at the center. ford is a global auto company, 45% of their sales only in north america. the announcement today of a big new hatchback release in india, a four-door hatchback they think will be a big part of the growth in one of the largest growth markets in the auto sector globally. india's auto sales were up 13%
in august. they expect to double within six years to 3 million units. we know about china. ford is number three in china. you look at ford's picture globally, they own a big chunk of mazda. this company actually can integrate, can use its global scale and can actually take market share from some of the weaker players right now and they're doing that. >> you put fresh capital in ford today. >> i would. i like the move today because it's broken through 20-day and 50-day resistance. people use technicals to pick their spots. this is a great case. those levels had significant resistance after it hit highs of 8:40 earlier in the summer. i think the fourth quarter auto production in the u.s. goes up 30% to 40%. i think it is a very exciting time to own ford. >> thank you. on tonight's "fast money," the top. rinked rim analyst has your set-up for tomorrow's earnings report. next, break news from the
bond pit the result of the $40 million, five-note option. >> we're watching these markets and we have a terrific guy to help us do that. the co-manager of a fun which has made money every year since 1984. what morningstar's manger is saying about where you should put your money right now. plus, is now the time to spend or save? what uncommon economic indicators are telling us about that. the latest misfortune for donald trump, courtesy of libyan leader moammar gadhafi. what's at stake for the donald's image. all of that straight ahead. crude oil has extended earlier losses after the had energy department's inventory week showed an unexpected gain. stocks modestly higher. the feds await the latest interest rates. that should come around 2:15 eastern time. results of the five-year
treasury note out in just a moment. personal note to roger the hot dog guy. look at your e-mail in-box. send me a note back. we love to hear from you. welcome to the second hour of "power lunch." wall street bracing for another treshcy auction, this time involving $40 billion in five-year notes. the results in just moments. stocks moving a bit higher ahead of the fed's interest rate decision due in a little bit more than an hour from now. intel, procter & gamble, verizon the biggest winners. the new commissioner of the federal housing administration claims the fha does not need a bail-out. diana olick talks live with the commissioner. the american bankers association out with the
selection of the 25 most powerful women in banking. two of them will join us live. meantime, we have that bond option coming up. it is terrific we have tom joining us, morningstar's reigning six-income manager of the year. he's with first pacific advisors, the co-managers of the spa new income fund, it's never posted a negative return in any calendar year since 1984. great to have you back with us, tom. auctions have been coming hot and heavy. the end the next year is the end of the '09 fiscal year and the government will have tried auction off off some i think it is $7 trillion worth of debt. you confident they're going to be able to continue to do that given this environment? >> it's not that they won't be able to continue to do it, it is just what's the price they'll have to pay to do it. you sort of look forward. whether you look at omb, which is from the white house or congressional budget office, they're expecting deficits the next five years of somewhere between $4 trillion and $5
trillion, which is additional borrowing that has to go on. >> do you think yields will stay low in that environment even as demand continues to be strong? >> i'm suspect that if you continue to borrow money at this pace, that the end result isn't going to start to be higher interest rates. there's going to be -- >> when you say "higher," what's the number that you're thinking about, when? >> you never like to give people time and price but you like to look at something like the ten-year treasury. >> we have the results in. hold that thought. rick santelli joins us now. the. >> the yield is 2.47. i'm going to grade it a c-plus. why? first of all, the 2.47% yield is three basis points higher. the auction is around 2:44, 2:45. higher yield, lower price. the bid to cover at 2.40% sounds
good. the direct bids played prominently in yesterday's two-year because they moved from base clan averaically from an a to a number around 11%. there is your bridge for the money managers, the money funds that aren't guaranteed anymore, may be going into short-term auction, maybe the five-year's too long, but we'll know that metric shortly. pay attention to that as well. c-plus on the five-year. >> tom, what kind of grade would you give it? >> i don't disagree. five-year is sort of the maximum maturity range that you find the central bank's going to participate. maybe you're getting some weakness from them. it is also interesting, as rick pointed out, that money managers, direct bidders, are starting to look more at the two-year and five-year. that's telling to tell you there is a concern that rates are going to start to move higher which makes owning that five-year a riskier proposition.
sort of begin with an average kind of grade is appropriate. >> finish your thought on how high yields you could see going, over what time frame? >> i'll use the ten-year as an tramp. if you look at the last 52 years, median yield on ten-year treasury is 6.20%. it was that level in the second quarter of 2000. it wouldn't surprise us in the next three to five years to see that kind of range for a number for a ten-year treasury. >> that's a 100% increase in yield. >> roughly, yeah. >> total return by the way ends up being 1%. >> you don't support buying treasuries here. >> no, that's the overpriced asset. >> we guessed 4 out of 5 saying sell treasuries. >> but that's the safe investment. >> unless you get inflation. >> is there a treasury bubble, tom? >> yes, we think there is a bubble approaching. if you sort of look at the amount of money that's coming to bond funds this year. much higher than you've seen into the equity fund.
it looks like people think bonds are the less risky place to be. that's what it appears is sort of trying to create this sort of bubble. if you see treasury yields increase and head back toward the reading levels that you've seen in history, then that's going to carry with it all the investment grade corporates, all the mortgages, all the agencies. they're all spread off of treasuries. to us, that whole high-grade component of the bond market is at risk. >> rick santelli, you want it jump in here? >> direct bids for the five-year were just shy of 11%. last auction they were under 3%. this is that money fund dynamic from friday's expiration of guarantees. many traders' opinion. showing up in that category, another turnstyle to pay attention to, just wanted to bring you that number. >> we're bringing up the intraday right now. to the nofs viewer it is going to look like geeldz really shot up here. >> it will tomorrow, of course, because there is a forward roll of four basis points on the
five. seven or eight or the two-year yesterday. >> we were talking about interest rates rising maybe because of an improving economy. the latest upbeat view from an american automaker, ford ceo saying he expects u.s. auto sales to rise in the next two years. phil lebeau joins us from chicago with details. >> these comments aren't a huge surprise. what's getting a lot of attention is the forecast for 2011 from allen mullally. take a look at shares of ford. this is the reason that this stock is moving aggressively today. one of the biggest movers in the market. shares of ford are up substantially again all because of the comments from allan mullally. he made them this morning over in india where he's there for introduction of a new ford vehicle here's what he said about the outlook for the u.s. market. >> we've assumed that we'll be
somewhere around 10 1/2 to 11 this year, 12, 12 1/2 million in 2010, and maybe 14 1/2 million in 2011. so a very gradual recovery of vehicle sales with a slow recovery in the economy. which i think is really prudent. >> mullally is not the only automaker executive who's showing confidence that sales will steadily increase. september sales when they come out next week, they'll drop maybe below 9 million as far as a sales pace. but keep in mind, that's due to the cash for clunkers. automakers are increasing production. it had been brought down so low in the first an second quarter, the big three have all increased production for the third quarter. general motors will add a third shift at three plants, adding
another 3,000 workers. automakers are begin to find the right level in terms of production and demand as they expect it for the next six months. we know that september and october will be weak as we come off of clunkers. the question is do we actually think we'll see the demand that ext executives are forecasting for the end of this year and first quarter of next year. check out email@example.com. >> optimism. 14 1/2 million sold in 2011. is anyone else on that page? that would be a near 50% increase from last year. >> that is substantially higher than most people i've heard. most people in the industry are saying it will probably get up to 12.7 million, maybe 13 million by 2011. any increase in here is gravy when they've all set the benchmark at 10 million, that's basically the break-even mark for all of the automakers now. you get up to 14 million, they'll make serious cash. >> thanks, phil.
tom, your thoughts on this recovery. we're starting to see these green chutes as we used to call them here. does it come with inflation? that's a question a lot of people wondering. gold is back above 1,000. oil getting comfortable around $70 a barrel right now. what do you see? >> from an inflation perspective, i feel inflation is more of a monetary event, if i print or creates lots of money, it starts to chase goods, that's mortgage inflationary environment. we would be in that sort of environment now, one of those examples of creation of money is to watch the federal reserve's balance sheet go from roughly $800 billion balance sheet to a $2 trillion balance sheet in a matter of months. that tends to create money. >> what should, in your book, the fed do right now? should they put forward an exit strategy if indeed they're printing all of this money? >> well, the difficulty they
find themselves in is the past times they've done exit strategies -- in '94 and '99, 2000, and 2006 and 2007, there's been a lot of uncertainty, a lot of volatility, it's been difficult, they've been somewhat successful. in this environment they've put much more stimulus into play. they're probably in a situation where the economy is better than it was, yes, but it's not that great. you don't want to take the stimulus off the table too early, because in our view the economy very well just might roll back over into a recession. we think they'll keep the stimulus for a longer period of time. >> tom, could i break in? about that fed balance sheet of $800 billion to $2 trillion, i realize by definition that's inflationary but could we actually not feel the full bad effect because we lost so much wealth, trillions in oil, trillions in stock, trillions in property, so there's this big
hole there. the number 2 trillion comes in, and maybe it doesn't have to be entirely inflationary or am i just totally wrong on that? >> what you need to factor in with this hole you're filling, you're filling it with borrowed money because the federal reserve borrowed money to buy the $2 trillion worth of assets of which it now has on its books. you really haven't created wealth, you just borrowed money to try to prop up the value of an asset. >> i want to drill down a little bit more into what you said about corporate bonds and high-quality corporate debt. guest after guest after guest comes on and that's what they recommend, go to high-quality corporate debt. you disagree. >> okay, lel loook at the ten-y treasury. what if in five years it is a $6.20% yield. on average, an investment-grade corporate has 1.34%, higher yield than a ten-year treasury. that would put it roughly 7.5%. if i bought that corporate today, held it for the five
years, it then yields 7.5% in that five years from now, my total return is about 3%. 3.2%. hardly what i'd call a great investment. it may have -- if you inflation 2% or 3%, nominal, at best, real return. >> what do you do at best is it. >> stay short. stay that five years and in. >> short maturity. from stay short maturity so you don't subject yourself to the risk of the rising interest rates. and bide your time until they rise and you get paid to take that risk. we don't think you're paid to take the rising interest rate risk today. >> all right. tom, great to see you. thanks for joining us today. thanks for your time. >> thank four having me. >> tom atteberry of first pacific advisors. watch the coverage on the fed interest rates an hour from now beginning at 2:00 p.m. eastern time. we're asking your views of the economy firsthand. what are you observing right now
anecdotally about the recovery or not? conspeck with us consumption or thriftiness? two e-mails about community that, one, we hear about a lot and the other we don't often hear about. las vegas, byron is a real estate agent in vegas. he's noticed auto traffic on the valley roads and freeways considerably down. vacant office/retail space is dominant in. strip malls and power shopping centers. here's a very interesting one out of fargo, north dakota of all places. jeremy lives in a town near there. he says golf courses are still packed, dairy queens are always full, just like the billboard in fargo says, "fargo is not participating in the recession." >> does that really exist? wow! >> if jeremy says it, it must be so. >> get us photos and e-mail to us. we'd love to see it. but you know, fargo didn't have
the big boom either in housing prices so it didn't come down as dramatically at other -- that's one of my all-time favorite movies, by the way. also ahead, what are the three best etfs to play in a lower interest rate? then from cheap eats on fancy magazine covers, to yachts featured in newspapers, uncommon indicators. what do they mean? are they telling us it is time to spend or save? housing taking center stage. a first on cnbc, diana olick talks to the new fha commissioner. bbbbbbbbbbbbbbbbbbb
barney frank says to reporters that, of course the t.a.r.p. will be extended. this is the $700 billion financial rescue plan. so controversial. barney frank saying it will be extended using the word "of course" as if it is a fate a come accomplish. fdic insuring up to $250,000. it was supposed to be temporary. that will be extended. michelle, we're about an hour away from the fed's decision and the central bank is expected to
leave interest rates unchanged. let's talk about the best etf plays in this environment. "the etf trend following beretbook," great news how to use etfs to enhans your portfolio. before we get to the three ways to play the weak dollar, low-rate environment and oil, you say one of the things people need to do is take -- use the 200-day moving average as a guide. >> the idea is following trends. the last ten years you've basically didn't make any money but if you picked certain areas that you could identify trends with you do very well, areas like technology in the '90s, oil last year. a 200-day average, very simple and easy to attain. and with etfs and all the choices that you have today, investors in taking their investments into their own hands can easily identify when to buy when you go above the 200-day
average and when you sell, go below 29the 200-day average. >> we gave you the challenge after weak dollar environment, low interest rate environment and oil and gold. perhaps an inflationary environment. the i shares russell 2,000 index is basically a way to play the small cap environment. >> yeah. as we're in this recovering economy, smaller stocks, smaller companies tend to be more nimble, they can ramp up. the russell 200 is a great proxy. as far as oil, we have u.s. oil, uso is the ticker symbol again, as we see a lower dollar, and also more demand for oil overseas, we'll continue to see oil prices higher. >> also the spider.
>> in all of the demand we're seeing in the emerging markets. >> the one on the top of the board, power shares u.s. dollar bearish index. >> if you think the dollar will continue to decline, here's a great way to hedge your currency. >> best of luck with the book. >> thank you. >> good luck with that. remarkable stuff there. let's get to our market reporters right now. matt? >> we're positive across the board now. dow, s&p and nasdaq. what isn't working today are transportation stocks and if you look at sector by sector, it's still a battle of two sectors. you have the energy stocks as the worst performer. they have improved though as the price of oil's firm up a little bit. they're still down 6 cents now. look at telecom stocks, gaining momentum. everybody on-board to what once was the first is now today the
first in terms of performance. boy, have i done that theme a lot. general mills, we like it. it gets better, they beat, they raised the market rewards to the tune of 5%. today the same cannot be said for auto zone. it is weak here today. i mentioned the transportation stocks, both amr and u.s. air lower today on word of secondary offerings. amr's last night, u.s. air's next week. nasdaq's up six points. couple of big stories, google, new 52-week high today. the ceo making some comments in pittsburgh, saying acquisitions are back on. has that stock on the move to the up side. apple shares, new 52-week high today, up about 2%. yahoo! 2.5% to the up side. reiterated a buy over at citi.
xilinx, up. >> we've rallied natural gas prices. you're talking the equivalent of about a $15 run. what's going on here? we have shortcomings, but a lot of it has to do with the expiration of the future contracts to the futures on monday. lot of people trying to cover these positions and getting out. with them getting out, there's less liquidity, more factors to force those prices higher. >> coming up next, uncommon economic indicators. cheap eats on the cover of "gourmet" magazine? $3,000 man cave in the "wall street journal." it is a time to save or is it time to spend? we'll drill down. and the new 52-week highs
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yet another stock getting a 52-week high. coca-cola enterprises is one of them, higher by 23%. 75% if you go it year-to-date. we've been having some fun the last few days. we're looking at anecdotal evidence of what's happening in the economy this is not about government statistics. this is about real-life oaks.
it is about looking out the window, what are you seeing right now? we've been hearing from a lot of you folks as to what's happening in your next of the woods as far as the economy goes. is it time to great or spend in more from jim taylor with the harrison group as well. good to see you. we look at magazine covers. show an example here. >> we have "gourmet" magazine. "the 21 best hot dogs in the world." "how o to find a steak for $14.50 in new york." now, it is not in the garbage. and "126 restaurants worth the money, great deals from great chefs." but i think magazines are lagging indicator. i think "gourmet" may be marking a turn in the economy. >> i think first of all, the most important index we want is the american index of family happiness. which counter to what most
people continue to believe throughout the recession, it is continuing to rise because couples are finding they're talking more about decisions they've got to make. one of the things we watch -- >> hole on, what is this? you ask people what? >> are you happy or not? >> yeah. about ten years ago we started asking people if they were happy or not. its abeen tracking along at about 50% happiness level in the country. went down a little after 9/11 but it's been sort of a stable index. it is up 20 points since the recession began. >> because? >> because couples are talking more about the things they're going to do. we've gone from a "i want" economy to a "we need" resourceful economy. pressure's off to keep up with the joneses and for people to make decisions that reflect what they think are their best interests at any point in time. it's really changed the ways families approach consumption. >> but that's to michelle's point, that "gourmet" magazine and others like itre now using perhaps that kind of data and
saying that's the way that we can sell to the happier family, if you will. correct? >> well, i think the way -- i think the way you sell to the happier family is make sure that what you're doing now really reflects these rising values and almost every couple we talk to report that they've become a lot more concerned about what their family really needs, rather than what they night want, and that has resulted in a couple of sort of other humerus indexes we watch. we have an index that watched pore noth pornography and the ba-da-bing phenom. that's down. we watch children and the significant purchasing in the household, 56% of capital spending in the households are made with the concordance of kids, particularly teenagers. people are talking amongst themselves. we're coming out with our first
missed forecast in a couple of weeks but we're forecasting a happier christmas -- >> hold on one second. >> if i can just take you back to your american family happiness index which you've plotted for ten years, did it plunge in september of '08 when the lehman crisis happened or did people continue to be happy even when times got bad? >> there was a real steep neurotic fall-off for two months. then once people got through the panic of the october statement, they began to plan with how they're going to deal with their problems. it is important to realize that while about a million people have fallen off the affluent index, those that haven't haven't really had much of an income effect. they've had an asset effect and they've gotten together as couples and said, what are we going to do, how are we going to do it and it's made them feel more resourceful, more confident and better about themselves as people. >> you're forecasting a happy christmas. for who? happy for retailers or --
>> what we're looking at, people already planning to get their families together, to get people together and to use christmas as a time to enjoy one another. >> not retailers. just families, not for retailers. >> it is going to be better than you expect, i guarantee it! >> much better than everyone's expecting. >> we'll be back in two weeks with the retail forecast that will be rock-solid. >> look forward to it. thanks, jim. we'll get to your e-mails later. more anecdotal things you're recognizing about the economy. a man with his finger on the pulse of the housing market. the new commissioner of the federal housing administration in his first television interview. you think you're having a bad day? well, just be grateful you're not donald trump. he's waking up to headlines about libyan leader moammar gadhafi pitching a tent on his real estate. back in two minutes.
actually. russian billionaire mchale prokorov will acquire 45% of the nets arena that is yet to be built in brooklyn and will get 80% of the nba team. they have to get it all approved by the nba, by mikhail prokhorov about to be the owner. last week the fha commissioner announced that the agency would likely fall short of its required 2% capital reserve. after reporting that shortfall, the commissioner announced several proposed changes to fha including hiring a chief risk officer and requiring higher capital
standards for loan originators. he also said the fha would not need a bailout but some disagree on that point. here to join us in his first television interview since taking the lead of the fha, the commissioner, thanks for joining us. given dlin questioelinquencies so high, does the fha have sufficient capital to back those loans? >> great question. at present, yes, we do. while we fell short of the 2% legislative reserve, that's a secondary capital account. we have a significant amount of capital in our primary reserve which is to cover expected defaults. to that extent the real combined capital is over $30 billion an exceeds 4% total capital. a bit of a misnomer to just look at 2% of the capital. that's a secondary reserve account to pay additional losses should the actual reserve account fall below zero. >> last summer you had -- not you but the previous
commissioner instituted risk-based premiums. that lasted until congress put a hold on that. that hold expires next week, i believe. would you perhaps, if you see that defaults could be going higher, reinstitute risk-based premiums? >> well, it is a great question. we're considering all possibilities. at this point when we look at the actuarial study and our capital reserves, look at the quality new book of business being created now in 2000 the and what we expect to see going forward, we don't think we'll increase risk-based privacy. it is definitely something to consider but it could actually hurt those who fha mortgages most. premiums will rise for those we have our mission to provide housing for. at the end of the day there's no reason to raise premiums if in fact you can get your capital levels back up to where they need to be simply by making some minor adjustments in your program like we announced in the
last week. >> would you say perhaps rule out credit score minimums? >> credit score minimums are another factor. these are all good questions. i can tell you i was just sworn in on july 15th. i've spent my first few weeks digging into these issues. yes, risk-based premiums, raising the flat premium, looking at credit scores. all of those things are things we would consider if we have to. but we don't believe we need to. we made some minor adjustments. we need to make sure capital levels are appropriate. that we're getting the rye data on refinanced mortgages. we're making other -- looking at other minor changes in the program. but at this point i don't see a need to do that either. >> keeping on the risk, you said you'll hire a risk officer. given that you've gone from 2% in the market to now over 30% of the market, does the fha have the resources to really look into underwriting and keep risks
to a minimum? >> that's a great question and all things that we consider every day. so let me just talk about the risk of the portfolio. it is very different. when we were 2% of the market, the vast majority of the mortgages being originated, particularly those higher credit quality were particularly fannie may, freddie mac. the quality of the book is significantly better. that being said, yeah, we need more resources and congress is appropriating those for us. >> finally, do you support an extension or an expansion of the first-time home buyer tax credit? >> it's had impact, it's being measured. the administration will have a recommendation and their position on where we stand on the tax credit, we'll support that position. >> thanks so much, commissioner david stevens. a no risk-based premiums,
no -- this is pushed for by the u.s. government for the fha? am i missing something? >> i'm not seeing your question. you're saying there would be no risk-based premiums going forward? >> right. that's my point. right? the whole issue is to give out homes to as many people as possible? >> well, no. there are certainly premiums and underwriting at fha. he's talking about changing -- she's asking about risk-based premiums going forward, are we giving out home to efforts one. >> absolutely not. i would ask everybody to consider this. we've had to bail out banks, bail out gses, fha does not need a bailout, it has $30 billion in capital. every loan we take is fully documented. we don't do stated income programs. today in the 2009 book if you look at it, our average credit score is up to 690 from 630 just a couple of years ago. the quality of the book is significantly better. it doesn't mean we're out of the woods but we're the last institution standing in this
space. >> okay, michelle, you heard it here. >> thank you, diana. new developments at ubs today. we now know the wealth management job may perhaps be a bigger job. maybe replacing robert wolf who runs the ubs american subsidiary. charlie gasparino, author of the new book "the sellout," available in stores now. >> blast off! >> you like the music. >> it's better than "burn baby burn disco inferno." >> we used that for david's book. >> yeah, he's up for everything. there is a chance -- i'm not saying it will happen but there is a good chance he'll ge the whole thing, the whole ubs title and replace this guy. replacing this guy, robert wolf.
interesting guy. big obama fund-raiser. under investigation in the cuomo auction rigged securities probe. from what i understand cleared. running -- there is his bio. from what i understand, mccann is a possible replacement for wolf if he does join. that's all wrapped up in this whole b of a thing. remember b of a bought merrill? b of a is essentially trying to prevent bob from working anywhereas part of some severance agreement. he was in court last week. he's been given an offer from ubs, from what i understand right now. what they're talking about internally is giving mccann the entire u.s. americas. that's a big thing for mccann. it would theoretically put him in place to run the whole investment bank which is something that mccann always wanted to do. mccann always thought he shall run merrill lynch from basically the day he got there. he is a pretty smart guy.
there's mr. wolf who is a major fund-raiser for obama. kind of controversial figure. was involved in the auction rigged securities probe, what what i understand cleared. he came up with some dispute over investment bankers. ubs wanted some compensation for that poaching. jeffries from what i understand, people at ubs, threatened to go public with the fact that mr. wolf was involved in this auction rigged securities probe. what i understand, ubs did not
back down. they've essentially stated they did get some compensation for that team. that was a major health care team that went recently. jeffries has no comment in all of this. the real headline here is bob mccann according to sources inside ubs is being corpsed for the ubs americas job which is a pretty big title if he should get it. not just wealth management, the whole kit and caboodle. good luck to bob. >> got it. thank you, charlie. american bankers say they are two of the most powerful women in banking.
despite the tough times in the financial industry, there have been a number of banking executives who have managed to weather the crisis remarkably well. the 5 most powerful women in banking is american banker, the annual tribute to the professional achievements of these women executives. numb er 3 and 14, good to see you. i'm going to be very frank with you. i never like this topic and i never like segments like this. we would never do something about the 25 most powerful men in banking, it would just be the 25 most powerful people in banking. we still do 25 the most powerful women. how long before you think this
kind of ranking because irrelevant because we don't have to talk about it anymore? >> i think there is always a place for the top women in any profession. mostly women are underrepresented at those levels. do i hope that in the near future it just becomes the top 25 professionals in banking. all of their achievements are rewarded equally. >> she's right, we do this because so far women are very underrepresented according to the population overall. how long before you think that changes significantly? >> if you look at the statistics as far as women coming through the ranks, they're till not where they need to be. middle managers sort of top off and it is very difficult to get women into the upper management positions in banking. probably if any financial services sector. >> why is that? >> well, i think we see a lot of women opt out, maybe to have families at a key time in their career. we have women that choose to, again have children and i also think that they move on, sometimes to do something
entrepreneurial or to -- >> but men have children. men have children. >> but they never stay home. >> having said this though, what about the adage that women are better risk managers than men in is there some genetic predisposition in that regard? >> i don't believe that hat all. i believe that's purely based on some kind of dna. we've had a chief credit officer that's been a male, and i will think he will tell you i walk a little further out on the risk plank than he would care to see me do. >> i couldn't agree more. our chief officer is a male and many of the folks who keep me in line are all men. i think it is just a matter of who you are and where you come from. >> is that why you got more of where you are, because you're more of a risk-taker which some seem as a man-like quality? >> i think i like to take strategic risks and move on the opportunities. you need to move on those if you're going to grow a company. >> donna, hi, i'm happy that
you're on today. we've known each other for a long time. but i do think taking strategic risk is important. i think it best differential yates certain women in the industry. >> very good. >> good discussion, folks. >> congratulations on the distinction. >> thanks. >> if we were to show you this article, for every single woman it lists how many children they have. do they ever do that with men? never. how do you ever balance your life with your work? they never ask men that. >> men get married. >> i'm sorry. my husband is -- >> i would sound like a whiner if i brought that up. >> my husband is a partner. moving on. say you're donald trump and you're very, very image conscience. imagine libyan leader moammar gadhafi setting up his tent on your estate? >> how bad is the pr hit to the donald? answered when we come back.
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his new york estate. he didn't even know about it. how does a micromanager like trump let something like this slip through? long-time gossip columnist lloyd groves who's editor at large for "the daily beast." lloyd, what gives in if donald can't control who's on his own land right here in the new york area, how is he supposed to run that empire? >> i am so baffled by this. in my interactions with the donald, he's been so detail oriented and so down in the weeds. i remember once doing a story about a disgruntled tenant at one of his buildings, he knew each an every tenant and had an argument for each an every one. the fact that this would slip by him is baffling. also today we haven't heard anything -- this is a huge catastrophe in terms of his brand. he's the biggest brand builder we've ever had. >> for people who may not know west of the hudson river, there was a lot of controversy some weeks ago about moammar gadhafi
wanted to set up his tent in englewood, new jersey where the country of libya owns an estate as he came here for the u.n. general assembly. big controversy, englewood, new jersey says thanks, but no thanks. >> it's not a secret that gadhafi's been trying to pitch his tent. he went to tavern on the green first and they said no. >> maybe the donald wants the publicity? am i being conspiracy theorist? maybe he loves this. >> not this kind. this is a guy who when tim o'brien of the "new york times" severely underestimated trump's vision of his net worth, trump sued him. >> and the suit continues, i believe. >> no, it was thrown out. >> what does he have to do, if this indeed hurts his image, to repair his image. >> fire himself? i think he's asking himself that same question. we haven't heard anything from him. i can't wait to hear what he says when he finally does come
out. >> he has a huge real estate development he hopes to get in the works in scotland, a big golf resort. in people in that area -- the town official said no thanks to that as well. this hasn't been donald trump's greatest day today. >> scotland hasn't been particularly kind to trump because it was scotland who released the master mine of the lockerbie bombing. had that in the happened maybe gadhafi pitching a tent there would have been a mere curios y curiosity. >> "the property was leased on a short-term basis to middle eastern partners who may or may not have a relationship with mr. gadhafi. we are look into the matter." >> maybe he has to sever ties with those partners. >> i suspect, as with often happens with the donald, we'll have another lawsuit. >> mr. grove, thank you for joining us. still ahead, are you spending or are you saving? >> your e-mails on the "lunch box" indicators. you're watching cnbc, first in business worldwide. when this school district added aflac to complement
2010. we've heard the government say that credit card debt has gone down by a record amount in the latest quarter. we've been asking you folks your observations on the economy and as we all know, real estate's local, recovery is local as well, whether or not you're getting it. reese in dallas is at a foreclosure conference, been there sunday since. attendance was 5,000 people, which is more than last year. no expense being spared there at that foreclosure convention. sandy says in her neighborhood, three neighbors on her street replacing sidewalks and driveways. one house on the next street just completed a massive renovation that turned a tiny ranch into a mansion. two others are putting on large additions and one is gutting the kitchen. the last one, helen in colorado, a local liquor store put an ad part-time, $10 an hour, 50 applicants. two men with families who were just laid off. many live over an hour away. we'll get to more of these as the week progresses.
"street signs" with erin burnett begins right now on this fed day. see you tomorrow. hello, everyone. i'm erin burnett. this is "street signs." fed decision a few moments ago. investors want to know the answer to a lot of questions. what does the fed think of the economy right now? can the fed untangle itself from the trills of dlafrs bailout programs out there? we'll have those answers and hear from the nation's top stock and bond investors. this is one of those days, there are quite a few things the market's looking for in this statement. right now the market up just about 30 points. steve leisman, what are you looking for? >> thanks, erin. expect no change in interest rates today but one of the more optimistic comments on the economy from the federal reserve in years. the fed said at its mid-august meeting the economy was "leveling out." some economists at the fed think
the economy's set to grow in the third and fourth quarters and the fed statement must take note, upgrading the economy while remaining conscious on the outlook. ben bernanke said last week the recession is over from a technical point of view but warned about gradual recovery where unemployment remains high. the statement could also have new commentary on the outlook for the fed's $1.5 trillion plan to purchase mortgages. in august the fedex tended the plan to buy treasuries but kept the amount of same. they could do the same here, extending the end date to end by the end of the year. some economists think the fed will take an "f" on that and instead make any changes in november. look for the discussion of exit strategies in general. more likely showing up in the meeting of the minutes that comes out two weeks from now. they've discussed ways to soak up the excess cash from the economy that the fed has put out there and is also working behind the scenes on plans to raise interest rates on excess reserves. that could be coming out over time.